much the concept of including assets, but, with available data sets, how to possibly move forward and include something about assets. This may be an issue that is too complex to handle.

  • How should extreme risks—that is, “upper tail” expenditures— be captured? Risk includes the risks at the upper tail and some individuals facing very high, catastrophic risks. Should that be the focus, at what level should that be set, and how should it be incorporated across members in a family?

Wolfe closed her remarks by summarizing the treatment of medical care needs in poverty measurement. In the original official poverty measure, there is an implicit inclusion of some medical out-of-pocket expenditures, but it does not capture variability—it is a very simple measure. The Supplemental Poverty Measure (SPM) subtracts medical out-of-pocket expenditures from the calculation of family-level resources, but it does not include the value of insurance benefit(s) in resources and does not incorporate variability in medical care needs in the thresholds. The 1995 National Research Council (NRC) report also recommended that appropriate agencies should work to develop one or more “medical care risk” indexes that measure the economic risk to families and individuals of having no or inadequate health insurance coverage. However, the report recommended that such indexes should be kept separate from the measure of economic poverty (1995:225).

Why a Separate Index?

Sarah Meier (University of Wisconsin-Madison) next discussed the need for developing a separate index, reviewed the literature on medical care risk indexes created by a number of people, reviewed various design considerations in developing an MCER index, and suggested a framework for developing this index. She also pointed out some of the limitations and challenges that must be addressed.

She noted that the incorporation of medical care need and resource considerations was problematic in the development of the SPM for two reasons. The first is the nonfungible nature of medical benefits, and the second is difficulties in defining and calculating medical need. Specifically, there is a limited ability to predict future expenditures at the individual level, resulting in misclassification. Perhaps with enough data, expenditures at a group level could be predicted accurately. But what specific expenditures an individual will have in a future period is something that cannot be predicted with any great accuracy. Even if one comes up with a reasonable prediction of expenditures that an individual will experience, variations in this predicted measure might necessitate a number of thresholds.

The National Academies of Sciences, Engineering, and Medicine
500 Fifth St. N.W. | Washington, D.C. 20001

Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement